In theory, a sterile solution of purified hemoglobin, Hb, could have the therapuetic attributes of a plasma expander along with the oxygen delivery capability of erythrocytes, and so would be useful in treating tissue hypoxia and ischemia. If it were safe, effective and type-free it would also have several important new therapeutic functions. However, because of free Hb's inherent physicochemical and pharmacokinetic properties a useful resuscitation fluid that uses free Hb is precluded. We propose to overcome these physicochemical and pharmacokinetic limitations by microencapsulating Hb, using a newly refined technique, and then suspending the resulting microcapsules in a plasma expander solution. These microcapsules, prototypal artificial red cells, we refer to as Neohemocytes, NHC. Preliminary results support the feasibility of the idea and show that the pharmacodynamic properties of Hb can be controlled. Suspensions of NHC are superior to solutions of hb in prolonging the survival time of rats that have had 95% of their blood replaced with experimental materials. The current NHC design is relatively non-toxic. Just as normal RBC's circulate undetected, and then age and are cleared by the reticuloendothelial system, artificial RBC's should initially be some what invisible to the RES, and as they age become increasingly visible. Basic studies are proposed to test novel hypotheses about nonspecific RES recognition. Strategies are outlined that will allow optimization of both the in vivo and in vitro NHC properties.